HelpRequired information1&2. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixedbudget as variable or fixed.PHOENIX COMPANYFlexible BudgetsFor Year Ended December 31, 2019Flexible BudgetFlexible Budget for:Variable Amount Total Fixedper UnitUnits Sales Unit Sales ofof 14,000Cost16,000Variable costsnces0.00Prev1.3of 8Next >e here to searchPriScDeleteF1F9F10F11F12InsF2F3F4F5F6F7F8%231D24.8.9.QWTYUS.DF\J.CVINM(8)+ II工小B* LOLI23 ework Required OSavedHelpPhoenix Company's 2019 master budget included the following fixed budget report. It is based on an expected productionand sales volume of 15,000 units.PHOENIX CОМPANYFixed Budget ReportFor Year Ended December 31, 2019Sales$3,150,000Cost of goods soldDirect materials$ 915,000240,000Direct laborMachinery repairs (variable cost)Depreciation-Plant equipment (straight-line)Utilities ($60,000 is variable)Plant management salariesGross profitSelling expensesPackagingShippingSales salary (fixed annual amount)General and administrative expensesAdvertising expense45,000315,000210,000210,0001,935,0001,215,00075,00090,000235,000400,000125,000230,00085,000SalariesEntertainment expense440,000ncesIncome from operations$375,000Problem 23-1A Part 1&2Prev13of 8Next >here to searchPriScDeleInsCF5F9F10F11F12F6F7F8F1F3F4F22334.6.78.9.TY11DGH.KLAZ.CVM+ IIVBL.

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Answered: 2. Prepare flexible budgets for the…

2. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixed dget as variable or fixed.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 1PA

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Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, each costing 166.06. The desired ending inventory for each month is 80% of the next months sales. b. The data on materials used are as follows: Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next months production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is 14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) f. The unit selling price of the subassembly is 205. g. All sales and purchases are for cash. The cash balance on January 1 equals 400,000. The firm requires a minimum ending balance of 50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January. Required: 1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.) a. Sales budget b. Production budget c. Direct materials purchases budget d. Direct labor budget e. Overhead budget f. Selling and administrative expenses budget g. Ending finished goods inventory budget h. Cost of goods sold budget i. Budgeted income statement j. Cash budget 2. CONCEPTUAL CONNECTION Form a group with two or three other students. Locate a manufacturing plant in your community that has headquarters elsewhere. Interview the controller for the plant regarding the master budgeting process. Ask when the process starts each year, what schedules and budgets are prepared at the plant level, how the controller forecasts the amounts, and how those schedules and budgets fit in with the overall corporate budget. Is the budgetary process participative? Also, find out how budgets are used for performance analysis. Write a summary of the interview.
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